FTX has reached a significant milestone in its bankruptcy proceedings as the US Bankruptcy Court for the District of Delaware has officially approved the company’s reorganization plan.
This comes nearly two years after the crypto exchange’s historic collapse in November 2022.
FTX Bankruptcy Reorganization Plan Approved
The confirmed plan, which received overwhelming support from creditors, is set to return an average of 119% of the value of claims, with some creditors potentially receiving up to 140% in cash. Approximately 98% of FTX’s creditors by amount are slated to receive their repayments within 60 days after the plan’s effective date.
According to the official press release, FTX estimates the total recovery to be between $14.7 billion and $16.5 billion, owing to assets recovered from various entities, including the US Department of Justice and international regulators.
Commenting on the latest development, John J. Ray III, Chief Executive Officer and Chief Restructuring Officer of FTX, said,
“Today’s achievement is only possible because of the experience and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by rebuilding FTX’s books from the ground up and from there marshaling assets from around the globe. It also reflects the strong collaboration we have had with governments and agencies from around the world that share our goal of mitigating the wrongdoings of the FTX insiders.”
Ray III, who took over from former CEO Sam Bankman-Fried, also said that the estate is poised to return 100% of bankruptcy claim amounts in addition to interest for non-governmental creditors through what he deems to be the “largest and most complex” bankruptcy estate asset distribution in history.
He added that the estate is working to finalize arrangements to distribute funds to creditors in over 200 jurisdictions worldwide.
To facilitate this, specialized agents are being engaged to ensure that recoveries are delivered securely and on time to customers worldwide.
Events Post FTX’s 2022 Downfall
FTX filed for bankruptcy in late 2022 following its collapse. In November 2023, Sam Bankman-Fried was convicted on seven criminal charges, including wire fraud and conspiracy, and sentenced to nearly 25 years in prison.
In May, the company’s co-CEO, Ryan Salame, was sentenced to 90 months in prison.
More recently, Caroline Ellison, CEO of Alameda, FTX’s sister firm, was sentenced to two years for her involvement in the company’s downfall. Former FTX executives Gary Wang and Nishad Singh are awaiting their sentencing. Singh is scheduled to be sentenced later this month, while Wang’s sentencing will take place in late November.
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